Suntech exec chair swap branded "misconceived and unlawful"

Suntechs decision to replace founder and former CEO, Zhengrong Shi, with Susan Wang as executive chair of the Chinese companys board of directors has sparked an internal management struggle. Shi has branded the move both “misconceived and unlawful”. The news comes in the same month as Suntechs US$541 million bond payment.

In a statement issued by Shi last night, it appears that the company director and chief strategy officer (CSO) is more than a little disgruntled at being swapped with Wang, who has been a director at Suntech since 2009.

"The decision was invalid and of no effect. The actions taken at this time by the rest of the Board show that they are not focused on the issues most important at hand and are not acting in accordance with the best interest of the Company," stated Shi, adding, "I will take all steps necessary to protect the Company from being harmed by unlawful actions such as the above. I am fully committed to continuing to serve the Company as Executive Chairman to the best of my ability and to guide it through these difficult times."

The Wall Street Journal (WSJ) further quoted him as saying, "As the founder, largest shareholder and director, I will do everything to save the company." Shi is believed to own 29% of Suntechs shares.

In response to the claims that Wangs appointment was unlawful, Suntech has reportedly issued a statement saying its decision "is valid and effective under the law of the Cayman Islands, the country of the Company’s incorporation."

Refinancing

Bloomberg quotes Shi as being "shocked" by the decision, and said that he has been excluded from board meetings for the last month. Shi added that Suntech has no plan to refinance the $541 million bond, due on March 15. According to the WSJ, however, the company is said to be in talks with international investors.

"The problem is they dont have a solution," Shi further told Bloomberg. "They need a viable business plan. They need to talk to all the bondholders and suppliers and government. All the stakeholders want to talk to me. All the bank CEOs want to talk to me. They want to know why Dr. Shi didnt show up."

Nitin Kumar, an analyst at Nomura Singapore Ltd, further told the news agency that Suntech appears to be "preparing for ceding control to a third party." He added, "Management change at Suntech was sorely needed given the execution missteps over the last five to six years."

Suntech is still to issue its Q4 and FY 2012 financial results. The delay has been prompted by the investigation into a 560 million security interest received from GSF Capital.

At the last stand, in December, Suntech said that it had "recently come to the conclusion that the security interest does not exist and that it has been the victim of a fraud by others. As a result, with respect to the guarantee that Suntech provided to lenders to a GSF project company in 2010, the Company is required to record a guarantee obligation in the range of $60 million to $80 million, which is an increase from the prior guarantee obligation of $3 million."

It added that the Public Prosecutor of Brindisi, Italy has brought charges against certain officers of GSF subsidiaries for reportedly failing to comply with necessary permitting process and building regulations for 12.7 MW of photovoltaic plants in Italy. "Investigations into a further 7.9MW of GSF-owned PV plants are also pending, but have not yet resulted in any charges being brought," said Suntech.

It added, "Accordingly, Suntech’s Audit Committee of the Board of Directors and the management team have concluded that Suntech’s interim condensed financial information for 2010, 2011 and first quarter 2012, and its annual consolidated financial statements for 2010 and 2011 together with the accompanying reports of Suntech’s independent registered accounting firm for 2010 and 2011 should not be relied upon by investors."

Share

pv magazine

The pv magazine editorial team includes specialists in equipment supply, manufacturing, policy, markets, balance of systems, and EPC.

Related

Your email address will not be published. Required fields are marked *

Comment

Name *

Email *

Website

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Keep up to date

pv magazine Global offers daily updates of the latest photovoltaics news. We also offer comprehensive global coverage of the most important solar markets worldwide. Select one or more editions for targeted, up to date information delivered straight to your inbox.

Email*

Select Edition(s)*

Hold Ctrl or Cmd to select multiple editions.

We send newsletters with the approximate frequency outlined for each edition above, with occasional additional notifications about events and webinars. We measure how often our emails are opened, and which links our readers click. To provide a secure and reliable service, we send our email with MailChimp, which means we store email addresses and analytical data on their servers. You can opt out of our newsletters at any time by clicking the unsubscribe link in the footer of every mail. For more information please see our Data Protection Policy.

Keep up to date

We send newsletters with the approximate frequency outlined for each edition above, with occasional additional notifications about events and webinars. We measure how often our emails are opened, and which links our readers click. To provide a secure and reliable service, we send our email with MailChimp, which means we store email addresses and analytical data on their servers. You can opt out of our newsletters at any time by clicking the unsubscribe link in the footer of every mail. For more information please see our Data Protection Policy.

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.